Public Service Co. of Oklahoma v. N.L.R.B., 01-9525.

• Citation: 318 F.3d 1173
• Decision Date: 05 February 2003
• Docket Number: No. 01-9533.,No. 01-9525.,01-9525.,01-9533.
• Parties: PUBLIC SERVICE COMPANY OF OKLAHOMA, Petitioner and Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent and Cross-Petitioner, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION 1002, Intervenor.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

318 F.3d 1173

PUBLIC SERVICE COMPANY OF OKLAHOMA, Petitioner and Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent and Cross-Petitioner INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION 1002, Intervenor.

No. 01-9525.

No. 01-9533.

United States Court of Appeals, Tenth Circuit.

February 5, 2003.

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Lynn Paul Mattson (Jon E. Brightmire and Michael C. Redman with him on the briefs) of Doerner, Saunders, Daniel & Anderson, L.L.P., Tulsa, OK, for Public Service Company of Oklahoma.

Fred B. Jacob (Robert J. Englehart, Arthur F. Rosenfeld, John E. Higgins, Jr., John H. Ferguson, and Aileen A. Armstrong with him on the brief) of National Labor Relations Board, Washington, DC, for National Labor Relations Board.

Sue D. Gunter (Victoria L. Bor with her on the brief) of Sherman, Dunn, Cohen, Leifer, Yellig P.C., Washington, DC, for Intervenor.

Before O'BRIEN and McWILLIAMS, Circuit Judges, and BRORBY, Senior Circuit Judge.

BRORBY, Senior Circuit Judge.

Public Service Company of Oklahoma petitioned for review of an order issued by the National Labor Relations Board. Among other things, the order required the Company to bargain collectively and in good faith with the International Brotherhood of Electrical Workers, Local Union 1002. The Board filed a cross-application for enforcement of the order. We granted the Union permission to intervene in support of the Board. Exercising jurisdiction under § 10(e) and (f) of the National Labor Relations Act, see 29 U.S.C. § 160(e) & (f), we deny the Company's petition for review and grant the Board's cross-application for enforcement.¹

Public Service Company of Oklahoma is a public utility providing electricity to customers in Oklahoma, Louisiana, Arkansas, and Texas. For almost fifty years, the Company has had a collective bargaining relationship with the International Brotherhood of Electrical Workers, Local Union 1002.

The Company and the Union began negotiating a new collective bargaining agreement on July 1, 1996. They met regularly for nearly six months without reaching an agreement. Throughout negotiations, Public Service Company insisted on several contract proposals granting it greater management rights in a variety of areas, arguing increased management control was necessary to make the Company more competitive in a soon-to-be deregulated economic environment. The Company argued it was not trying to "break" the Union but "to clearly establish the rights of [the Company's] management to run the business without interference." The Union did not agree to any of the Company's contract proposals. Public Service Company, accusing the Union of negotiating in bad faith, declared an impasse in bargaining. The Company then implemented portions of its final contract offer on December 29, 1996.

Following Public Service Company's implementation of its final contract offer, the Union filed three separate unfair labor practice charges against the Company.² After investigating the charges, General Counsel for the National Labor Relations Board issued a consolidated complaint against the Company. In due course a hearing was held, and the administrative law judge issued a decision finding, among other things, the Company violated § 8(a)(1) and (5) of the National Labor Relations Act by insisting on proposals undermining "the Union's representational function" as a condition for agreement. Although the Company filed exceptions to the administrative law judge's opinion, a three-member panel of the National Labor Relations Board affirmed "the judge's rulings, findings, and conclusions." The Board found the Company's contract proposals "would have given the [Company] extraordinarily broad control over employee benefits and discipline and discharge." The Company's "proposals taken as a whole required the Union to cede substantially all of its representational function." The Board concluded the Company violated the Act by "insisting" on these proposals throughout negotiations "as a price for any collective-bargaining agreement." This petition for review and cross-application for enforcement followed.

Employer's Bad-Faith Conduct

Public Service Company argues the National Labor Relations Board's decision finding the Company bargained in bad faith is inconsistent with established case law. We review the Board's conclusions of law de novo and "uphold the [Board's] factual findings if they are supported by substantial evidence in the record as a whole." See N.L.R.B. v. F & A Food Sales, Inc., 202 F.3d 1258, 1260 (10th Cir. 2000) (quotation marks and citation omitted). Under the National Labor Relations Act, employers commit an unfair labor practice if they "interfere with, restrain, or coerce employees in the exercise of the[ir] rights" to organize and bargain collectively, 29 U.S.C. § 158(a)(1), or if they "refuse to bargain collectively with the representatives of [their] employees," 29 U.S.C. § 158(a)(5). The Act defines the obligation of employers to bargain collectively as the "obligation ... to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment." 29 U.S.C. § 158(d). The obligation to bargain in good faith "does not compel either party to agree to a proposal or require the making of a concession." Id. In determining whether the employer bargained in good faith, the Board may not "sit in judgment upon the substantive terms of collective bargaining agreements." N.L.R.B. v. American Nat'l Ins. Co., 343 U.S. 395, 404, 72 S.Ct. 824, 96 L.Ed. 1027 (1952). However, in determining good faith, the Board should examine the totality of the circumstances, including the substantive terms of proposals. See Borden, Inc. v. N.L.R.B., 19 F.3d 502, 512 (10th Cir.1994); N.L.R.B. v. A-1 King Size Sandwiches, Inc., 732 F.2d 872, 874 (11th Cir.1984). "Sometimes, especially if the parties are sophisticated, the only indicia of bad faith may be the proposals advanced and adhered to." N.L.R.B. v. Wright Motors, Inc., 603 F.2d 604, 609 (7th Cir.1979).

The Company claims the Board's decision is incorrect because it found bad faith without identifying which of the Company's contract proposals were illegal or explaining why they were illegal. The Company, however, misunderstands the Board's decision. The Board's decision was not based on the illegality of any particular proposal. Instead, the Board held the Company violated the Act "by insisting as a price for any collective-bargaining agreement that its employees give up their statutory rights to be properly represented by the Union." In other words, the Company's rigid adherence throughout negotiations to a battery of contract proposals undermining "the Union's ability to function as the employees' bargaining representative" demonstrated it "could not seriously have expected meaningful collective bargaining."³ The Board did not err in inferring bad faith from this conduct.⁴ See Capitol Steel & Iron Co. v. N.L.R.B., 89 F.3d 692, 696 (10th Cir.1996) (explaining an employer may violate its duty to bargain in good faith if its conduct "reflects a design to undermine the union in its role as the employees' sole bargaining representative"); Borden, Inc., 19 F.3d at 512 (noting "rigid adherence to disadvantageous proposals may provide a basis for inferring bad faith" (emphasis in original)); Colorado-Ute Elec. Ass'n. v. N.L.R.B., 939 F.2d 1392, 1405 (10th Cir.1991) (noting that maintaining a "rigid position throughout negotiations ... could potentially be the basis for a finding of bad faith" (quotation marks omitted)).

Public Service Company also argues the Board's decision "nullifie[s]" the Supreme Court's decision in N.L.R.B. v. American National Insurance Co., and our decision in Colorado-Ute Electric Ass'n v. N.L.R.B. We fail to see, and the Company does not explain, how the Board's decision conflicts with these decisions. The Supreme Court held in American National that bargaining for a management function clause is not, "per se, an unfair labor practice." American Nat'l Ins. Co., 343 U.S. at 409, 72 S.Ct. 824. In keeping with American National, the Board in this case did not condemn Public Service Company merely for bargaining for certain proposals. Instead, it held the Company bargained in bad faith by insisting throughout negotiations on contract proposals undermining "the Union's ability to function as the employees' bargaining representative." In Colorado-Ute, we held an employer may lawfully implement a management function clause upon reaching a valid impasse in bargaining. See Colorado-Ute, 939 F.2d at 1404-05. Our decision was informed by the Board's findings the employer negotiated in good faith and reached a valid impasse in bargaining. Id. at 1405. In contrast, the Board in this case found the Company bargained in bad faith by insisting throughout negotiations on proposals undermining the Union's representational function. A valid impasse in bargaining was never reached. Therefore, Public Service Company could not lawfully implement its final contract offer. See Newspaper Printing Corp. v. N.L.R.B., 625 F.2d 956, 966 (10th Cir.1980). The Board's decision finding the Company bargained in bad faith is supported by the evidence and case law.

Alleged Bad-Faith Conduct by the Union

Public Service Company argues the administrative law judge erred in failing to find the Union bargained in bad faith. The Company claims there is "undisputed" evidence the Union employed bargaining strategies found in a manual entitled The Inside Game. The manual is a forty-one-page publication instructing employees on strategies to "agitate and pressure the employer prior to and during the bargaining process." The Company claims the Union, following the strategies outlined in the manual, illegally "avoid[ed] an impasse," "hurt production," and refused "to consider any of [the Company's] ... different proposals."

The administrative law judge...